Why Economic Development As a Panacea for Middle East Problems is a Myth

For example, when discussing his economic development policy in the foreign policy presidential debate, Obama cited his government’s “organizing entrepreneurship conferences.” And in reality a lot of the money is simply a payoff to local regimes or a way to shore them up. It has nothing to do with real development.

The story of the battle of factions and corrupt leaders in the Palestinian Authority over awarding a mobile phone contract; how EU-financed public housing turned into luxury apartments to reward regime supporters; or the sabotage against building an improved sewer system in the Gaza Strip -- even though foreign aid was paying for the whole project -- are wonderful case studies in how economic development campaigns that look good in the West amount to a joke on the ground.

There are, however, three countries that could benefit from economic development efforts if they were to be focused. Those are Tunisia, Morocco, and Jordan. Tunisia, of course, is currently ruled by an Islamist-dominated regime. Whether that government will remain cautious or turn increasingly radical -- pressed on by rampaging Salafists -- is not clear. Strengthening the moderate forces in Tunisia, which are more proportionately substantial than in any other Arabic-speaking country, is a worthwhile effort but it might not work.

Ironically, Morocco and Jordan are led by moderate regimes threatened by a public opinion that is often radicalized due to poverty. Even there, however, this is not the sole factor. Jordan, for example, has a powerful opposition Brotherhood and a potentially radicalized Palestinian majority. The Palestinians who came there after being expelled from Kuwait in 1991 (because of the PLO’s support for Saddam Hussein’s invasion) brought in a lot of riches and business skills. Amman has become a much wealthier city but Jordanians generally don’t seem to have benefitted much.

But Jordan is relatively small, weak, and doesn’t cause trouble, while Morocco is not a factor in the region’s international affairs. So the places where a real economic development effort could really make a difference get neglected. For a while, the Saudis talked about admitting Jordan to the rich man’s club, the Gulf Cooperation Council, and giving a billion dollars in aid. But nothing came of it in the end.

Remember that the United States gave tens of billions of dollars in aid to Egypt without getting gratitude or popular moderation. Similarly, the United States gave money or helped organize an effort for the Palestinians that constituted the most aid money given per person in history. Yet this didn't progress on the peace process, a transformation in Palestinian thinking, or gratitude.

At any rate, while “economic development” sounds like a great idea, a fine way of making people happy, getting them to love America, and undermining radicalism, in practice it isn’t so effective.